AN I-NET LOSS FOR PHOENIXCITY FORGIVES DIMENSION CABLE'S OBLIGATION TO PROVIDE A DATA-TRANSMISSION SYSTEM

Here's something to consider while you wonder whether your house lies in the path of the information highway: Earlier this year, Phoenix quietly amended its contract with Dimension Cable to drop language requiring the company to install a two-way industrial cable-TV network paralleling residential lines. Among the industrial network's imagined uses would have been data transmission and video conferencing by schools, government offices, banks and other businesses that communicate with branch offices.

Many of the promises now being made for cable TV's future--Bank at home via fiber optics!--were once made for this partly built but never operational system, whose trunk lines for years have been buried beneath Phoenix's major streets. Those promises were a big part of cable television's appeal, back in the early days of build-out, when such networks were standard in many of the contracts negotiated by cities around the country. An industrial network--or I-net, in cable code--was typically the kind of concession municipal negotiators wanted in exchange for letting cable companies bury their wires in city-owned rights of way. Phoenix's I-net was a part of the first cable-TV contract ever written by the city, back in the mid-1970s. Dimension, now the dominant cable provider in Phoenix and most of its suburbs, inherited the I-net obligation as it bought out the city's existing contract during the 1980s.

But those contract stipulations are now gone. The contract was amended so quietly--by the Phoenix City Council, way back in February--that VCAT, the local cable watchdog group, didn't learn about it until October. The passing of the I-net has implications that extend beyond the small group of cable diehards that make up Valley Community Access Television.

Though the potential of most I-nets has never been realized, in places where it has--the western suburbs of Portland, Oregon, for example, where public-interest groups were diligent in prying services from their cable operator--the I-net has functioned as a bonus public communications utility, providing schools, libraries, even municipal sewage authorities with a data-transmission alternative to more expensive telephone companies.

A second I-net in that area serves local businesses, which also bypass phone companies at considerable savings, according to Andy Beecher, a former administrator of the Oregon system, who places its dollar value to citizens "in the millions--$15 million, $18 million, something like that."

As VCAT was stunned to learn just a few weeks ago, Phoenix essentially swapped its I-net for $600,000 worth of cable-television hookups in hard-to-wire city buildings around town, including firehouses, police stations, libraries and both the old and new city halls. The major benefit to the city of that trade, say Phoenix officials who engineered the deal, is that more city workers now will be able to watch the Phoenix Channel, a municipal public relations organ that broadcasts city council meetings and other programming on Dimension's Channel 11.

To Ferd Haverly, VCAT's most visible member, the industrial-network-for-cable-hookups trade doesn't feel like a very good deal. Haverly all but stumbled across the contract amendment--known to interested parties as Amendment 7--while hounding city officials on another cable-related issue. "The people with power at City Hall and Dimension together are acting with almost a sense that they can do just about anything they want and get away with it," says Haverly. "It's a feeling of real powerlessness." According to city officials, Dimension initiated I-net discussions several years ago, after taking a survey that showed little business-community interest in the network should it be completed. Ivan Johnson, a Dimension vice president of public affairs, says the net had other problems: It didn't extend into the suburbs and had never been installed in downtown Phoenix. Business leaders, wary of the often unpredictable service of their own cable-TV hookups at home, also were skittish about using its sister system to transmit data.

Providing motivation for Dimension was the pending expiration of its contract with the city in June 1994. "I think they wanted to get [the I-net] cleaned up before the negotiations started," says Pat Manion, the deputy city manager who oversees cable dealings. And when it came time to negotiate away the I-net, Dimension brought a persuasive legal argument to the table. Changes in federal cable law enacted in 1984 state that a cable company's contractual obligations could not be enforced if they were "commercially impracticable," says Terry Parker, the public works official who oversees the city's cable contracts (Insight Cable serves a small chunk of the city's cable customers).

Dimension contended that the I-net fit the definition of "commercially impracticable," considering that it would have to pass the cost of completing the network on to residential subscribers. "You may get a protracted legal debate that you may not win," says Manion. "Any time that you get into this type of discussion, it really becomes a discussion among attorneys."

In exchange for not waging a legal challenge, the city got free cable hookups--44, to be exact, at various spots around town. According to Parker, these hookups will help the city realize some of I-net's lost potential by allowing more municipal workers to watch informational and training programs on the Phoenix Channel, the city-run public-affairs feed subsidized (to the tune of about $1 million annually) by cable customers via fees Dimension pays to the city. "We thought we would use the institutional system for training," says Parker. "We always talked about being able to do live training for police and fire, rather than loading up all the fire trucks and sending them to the academy and taking them out of service."